Associated Builders and Contractors (ABC) reports that its Construction Backlog Indicator declined to 8.7 months in March, according to an ABC member survey conducted 20 March 20 to 3 April. The reading is 0.4 months higher than in March 2022.
View ABC’sConstruction Backlog Indicator andConstruction Confidence Index tables for March. View thehistoric Construction Backlog Indicator and Construction Confidence Index data series.
Backlog slipped in March and is now at its lowest level since August 2022. Backlog is down on a monthly basis in every region except for the South, which continues to be associated with elevated levels of current and future construction activity.
ABC’s Construction Confidence Index reading for sales increased in March, while the readings for profit margins and staffing levels fell. All three readings remain above the threshold of 50, indicating expectations of growth over the next six months.
“The deceleration in nonresidential construction activity may have started,” said ABC Chief Economist Anirban Basu. “With widespread fears of recession, credit conditions tightening, and more decision-makers turning their attention to cost containment, new construction work may be more difficult for contractors to line up.
“While the confidence and backlog data weakened in March, they indicate a slowing of activity rather than a shift into reverse,” said Basu. “There is a widely held view that financial conditions are tightening in the aftermath of the failures of Silicon Valley Bank and Signature Bank. To the extent that this is true, one could anticipate further slowing and less industry confidence during the months ahead.”
Note: The reference months for the Construction Backlog Indicator and Construction Confidence Index data series were revised on 12 May 2020 to reflect the survey period better. CBI quantifies the previous month’s work under contract based on the latest financials available, while CCI measures contractors’ outlook for the next six months.
